Iliad : Press Release

FIRST-HALF 2016 RESULTS

Paris, August 31, 2016

• Landline business: with the number of subscribers up to nearly 6.3 million, Free takes back the position of France's leading alternative Broadband and Ultra-Fast Broadband operator.
• Mobile business: with 400,000 net adds in first-half 2016, the Group has been France's leading recruiter of mobile subscribers for over four years.
• Continued success for 4G: the 4G subscriber base has doubled in the space of one year, the Group has the sector's highest average monthly data usage per 4G subscriber at 3.9 GB, and the pace of 4G rollouts has been stepped up with 1800 MHz and 700 MHz frequencies coming on stream.
• Profitable growth confirmed, with year-on-year increases of 6.3% for revenues, 11.5% for EBITDA and 17% for profit for the period.
• The Group has an opportunity to become Italy's fourth mobile operator.

SIGNIFICANT EVENTS IN FIRST-HALF 2016

In the first half of 2016, the Group saw continued growth, with revenues from services climbing 7.3% (and overall revenues including handsets up 6.3%). The performance delivered for the period was driven by (i) higher growth for the Landline business, which posted a 3.4% revenue rise (compared with 0.5% in first-half 2015), (ii) a solid showing from the Mobile business, which once again reported double-digit revenue growth (mobile services revenues rose by 13.6%), and (iii) good sales momentum, with over 500,000 net new subscribers signing up for the Group's landline and mobile offerings, enabling Free to take back the position of France's leading alternative Broadband and Ultra- Fast Broadband operator.

In line with its objectives, the Group continued its mobile network rollout process, which enabled it to increase its coverage rate and, as a result, its profitability. Consequently, consolidated EBITDA was up 11.5% on the same period of 2015.

The most significant events of first-half 2016 were as follows:

n Landline business: the Group is now the leading alternative Broadband and Ultra- Fast Broadband operator in France on the back of 123,000 net adds for landline Broadband and Ultra-Fast Broadband offerings, representing a net add market share of 37%1. Free continued its robust sales momentum during the period, signing up as many subscribers as in the first half of 2015. This good subscriber recruitment level was

achieved despite a fiercely competitive environment characterized by aggressive marketing and pricing strategies from the Group's competitors, notably one-off targeted marketing campaigns. Against this backdrop, ARPU edged down to just under €34, but the Landline business still managed to step up its pace of growth with revenues up by more than 3% to over €1.3 billion.

n Mobile business: nearly 400,000 net adds in first-half 2016. Thanks to its ongoing strategy of enriching its mobile offerings, the Group was once again France's leading recruiter of mobile subscribers in the first half of 2016 - a position it has held for over four years. The Group's net adds for mobile subscribers came to nearly 400,000 during the period, whereas the overall market saw a net reduction of 105,000 subscribers. At

June 30, 2016, the Group had over 12 million mobile subscribers, giving it a market share of 17.4%2. Services revenues generated by the Mobile business advanced by 13.6% year on year to just under €1 billion. In addition, the weighting of the €19.99/month plan (or

€15.99/month for Freebox subscribers) within net adds rose once again, reaching a record level during first-half 2016.

n Continued success for 4G, with the number of 4G subscribers rising sharply once again during the period and totaling 4.7 million at June 30, 2016. This means that the 4G subscriber base has doubled in the space of one year. Average monthly data usage per 4G subscriber - which was already among the highest in Europe - also continued to rise, reaching 3.9 GB and representing a 77% year-on-year increase.

n Ongoing brisk pace of ultra-fast landline and mobile network rollouts. During the first half of 2016, the Group increased its 4G coverage rate to 69% of the French population, notably thanks to (i) the deployment of over 900 new 4G sites, (ii) around 1,100 sites being equipped to use frequencies in the 1800 MHz band (which have been

1 Company estimate.

2 Metropolitan France excluding M2M.

fully available to the Group since May 2016), and (iii) the opening of the first 700 MHz sites. The Group also stepped up the pace of its FTTH network rollout during the period, with the number of connectible sockets increasing by more than 600,000 to almost

3.1 million at June 30, 2016.

n A rise in the Group's profitability. Consolidated EBITDA advanced by 11.5% to

€809 million in first-half 2016, fueled by an increase in the volume of mobile traffic carried directly on the Group's own network, and the EBITDA margin widened by 1.6 points to over 35%. Consolidated profit for the period came to €190 million, up 17% on first-half 2015 despite an increase in depreciation charges (notably due to the faster pace of network rollouts).

n A solid financial structure, enabling the Group to pursue its investments in ultra-fast networks and consider growth opportunities. The Group's pro-active capital expenditure strategy for both its landline and mobile infrastructure will enable it to become more independent and to further increase its profitability for the coming years, while at the same time enhancing its subscriber service. Capital spending in first-half 2016 totaled €622 million and notably related to (i) the rollout of the Group's mobile network, with over 750 new sites opened and around 1,100 sites migrated to be able to use frequencies in the 1800 MHz band, and (ii) the acceleration in rollouts for Ultra-Fast Broadband in the Group's Landline business, particularly outside very densely populated areas. Also during first-half 2016, the Group paid the first installment of the purchase price for the acquisition of its frequencies in the 700 MHz band, which amounted to €237 million. Despite this outlay, the Group's financial structure remained strong, and with a leverage ratio of 0.89x at June 30, 2016, it was once again one of the European telecom operators with the least amount of debt.

n A unique opportunity for the Group to become Italy's fourth mobile operator. At the beginning of July 2016, the Group signed an agreement with the Hutchison and VimpelCom groups in connection with the plan to merge their respective H3G and Wind subsidiaries. This agreement - which is still subject to the European Commission's approval - provides for Iliad to acquire assets which would enable it to become Italy's fourth mobile operator.

KEY INDICATORS

Operating performance indicators

Subscriber numbers June 30, 2016 June 30, 2015 June 30, 2014

Total mobile subscribers	12,080,000	10,925,000	9,095,000
- Of which 4G	4,700,000	2,400,000	-
Total Broadband and Ultra-Fast Broadband subscribers	6,261,000	5,991,000	5,735,000
Total number of subscribers	18,341,000	16,916,000	14,830,000

Other indicators	Six months to June 30, 2016	Six months to Six months to June 30, 2015 June 30, 2014
Broadband and Ultra-Fast Broadband ARPU (in €)	33.90	34.50	35.80
Freebox Revolution ARPU* (in €)	>38.00	>38.00	>38.00
Number of connectible FTTH sockets	3.1m	-	-
Average 4G data usage (in GB per month per subscriber)	3.9 GB	2.2 GB	-

* Excluding promotions.

Financial performance indicators

In € millions	Six months to June 30, 2016	Six months to June 30, 2015 %change
Consolidated revenues	2,296.9	2,159.9	+6.3%
- Landline	1,329.1	1,285.2	+3.4%
- Mobile	973.4	880.4	+10.6%
- Intra-group sales	(5.6)	(5.7)	-1.8%
Consolidated EBITDA	808.5	725.0	+11.5%
Profit from ordinary activities	360.2	329.7	+9.3%
Profit for the period	190.4	162.9	+16.9%
Leverage ratio	0.89x	0.84x	+6.0%